Retaining Human Resources

1. Retaining Human Resources

2. Forms of Compensation • North American and European international companies tend to reward employees based on the type of work performed and the skills required. • In Singapore and Hong Kong, individual performance and skill influence compensation.

3. Forms of Compensation • Since, compensation standards vary around the world, local laws, employment practices, and employer obligations should guide companies as they design compensation packages.

4. Cultural Sensitivity • these benefit packages include both cash and noncash items. • The mix of benefits varies from country to country, but the cash component is usually the largest. • Some companies offer discounted products or services to their employees as noncash compensation.

5. Cultural Sensitivity • In European countries, items such as lunches and transportation are often part of the noncash executive compensation. • In less-developed countries, basic foods such as rice and flour can be part of the noncash benefits.

6. Base Salary • For parent-country nationals, compensation usually involves a salary used to maintain the customary standard of living of the employee and their family.

7. Expatriate Bonus • Often, companies must pay a premium to persuade an employee to work abroad. • It is compensation for adjustment problems and for hardship caused by living and working abroad.

8. Cost-of-Living • compensates for the fact that basic living costs vary greatly around the world.

9. Employee Benefits • compensates for the additional expenses of living abroad such as local taxes and contributions to government insurance programs. • They also include relocation expenses, high-risk insurance premiums, and extra educational and medical expenses.

10. Evaluating Performance • With the ethnocentric approach, parent-country nationals primarily set and administer the standards. • In contrast, with the polycentric approach, host-country nationals primarily set and administer the standards.